Energy-Sport-Interaction. The company is a core enterprise for intelligent automotive driving focusing on the sports side. In the future, automobiles can be divided into above the chassis (cockpit interaction) and under the chassis (energy, motion). Hawn automotive products cover sensors and domain controllers, and are the core enterprise for intelligent driving cars focusing on the sports side.

The core enterprise for intelligent driving has continued to grow in performance. The company's business focuses on intelligent driving, mainly engaged in vehicle camera systems, vehicle video driving recording systems, ultrasonic radar systems, etc. The main products include in-vehicle monitoring systems, electronic rearview mirror systems, integrated driving and parking systems, active front-view safety systems, domain controller systems, intelligent parking systems, intelligent vision systems, ultrasonic radar systems, millimeter-wave radar systems, and vision sensor systems. In 2023, revenue of 1.202 billion yuan was achieved, up 11.4% year on year, and net profit to mother was 0.114 billion yuan, up 8.5% year on year.

On the industry side, intelligent drivers have long tracks, large spaces, and independent suppliers have emerged. In terms of market space, as L1-L4 continues to penetrate, we expect the global market size of intelligent driving sensors (including cameras, millimeter-wave radar, ultrasonic radar, and lidar) and driving domain controllers to increase from 287.2 billion yuan in 2023 to 509 billion yuan in 2025, with a CAGR of 33%. In terms of the competitive landscape, local camera players include Desai Xiwei, Howen Auto & Electric, etc., local ultrasonic radar suppliers include Junge Electronics, Howen Auto & Electric, etc., and local players of corner radar include Centtech, Desai Seaway, and Howen Auto & Electric. We believe that with advantages such as cost performance and quick response, local suppliers have a broad space to replace domestic products.

On the company side, Hawn Auto & Electric is an intelligent driving solution service provider, increasing prices, increasing volume, and focusing on R&D. 1) Price increase: From the initial camera, ultrasonic radar, and vehicle driving recording systems to the current sensing layer (millimeter wave radar, surround view, parking system, etc.) and decision layer (driving domain controller), the value of supporting bicycles has increased from a few hundred yuan to over 5,000 yuan. 2) Volume increase: The company's intelligent driving business was initially concentrated on joint venture and own-brand fuel vehicle customers such as Nippon, Dongfeng Nissan, SAIC Volkswagen, Geely, and Great Wall Motor. Since 2023, the company's customers have shown trends in new energy (BYD, Ideal, Xiaopeng, Cyrus, Great Wall, etc.) and globalization (PSA Global, Volkswagen, Ford Global, Renault Global, etc.). The volume of new energy customers and global customers is expected to drive the continuous growth of the company's intelligent driving business. 3) Heavy research and development: Howen Auto & Electric's R&D cost rate exceeds 10%, the number of R&D personnel accounts for more than 30%, and focuses on software and algorithm research and development.

Risk warning: upstream core shortage and raw material price increase risk; downstream production and marketing risk.

Investment advice: The company is a core intelligent driving enterprise. The company is expected to have revenue of 1.31/1.58/1.93 billion yuan in 24/25/26, net profit of 0.115/0.139/0.171 billion yuan, corresponding EPS of 1.25/1.51/1.85 yuan, giving it 45-50 times PE in 2025, corresponding to the company's reasonable valuation range of 67.83-75.37 yuan. The first coverage gives it a “superior to the market” rating.